Business News of Thursday, 15 September 2016
Utility regulator, PURC, is uncertain if its jurisdiction to determine electricity tariffs would be ousted under a new arrangement to leave power distribution in the hands of private firms.
The Public Utilities Regulatory Commission (PURC) is demanding an interpretation of a provision in the agreement that seem to restrain and curtail its powers as they relate to the fixing of tariffs.
There have been claims that its constitutional mandate to set electricity prices could be taken over by an international corporation.
“We all need an interpretation of Article 7.1 [of the MiDA Compact II]… we also need to find out the spirit behind 7.1…it is not clear to everybody” PURC Director of Public Affairs, Nana Yaa Jantuah said on Joy FM’s Midday News Thursday.
She was referring to Section 7.1 of the Millennium Challenge Compact between The United States Of America acting through The Millennium Challenge Corporation and Ghana.
The provision states, “the Government will proceed in a timely manner to complete all of its domestic requirements for this Compact to enter into force.
The Parties understand that this Compact and the PIA, upon entry into force, will prevail over the domestic laws of Ghana”.
The Compact II involves the handing over of the Electricity Company of Ghana to a private concessionaire which is expected to improve efficiency of the power distribution company responsible for distributing power to at least 70% of the country.
A civil society group Wassa Association of Communities Affected by Mining, (WACAM) first made the claim that the terms of the Millennium Challenge Compact II indicates the PURC will have no powers in determining the tariffs.
Hannah Owusu Koranteng
WACAM Associate Executive Director Hannah Owusu-Koranteng said this at a public forum organised by Integrity Initiative with representatives of MiDA, the Public Utilities Workers Union and other stakeholders in the power sector.
According to her, if the deal goes through, utility tariffs will be determined by the International Finance Corporation (IFC) which is in contravention of PURC Act, (Act 538).
If the MiDA has its way it will render PURC “almost useless”. “Even the labour laws could be set aside…it is a serious issue,” she asserted.
She is convinced that the concession deal will spell doom for the Ghanaian people because Ghana’s most important resource, power, will be governed by forces beyond its borders.
“If the agreement is going to take us into neo-colonialism, why should we continue doing that?” she said and called for the cancellation of the deal.
But reacting to claims of impending redundancy, Nana Yaa Janutah called for a clarification of any ambiguity in the deal.
She said the PURC was not part of discussions on the MiDA concession agreement.
“We don’t know whether it is a treaty or a commercial agreement,” she said.
To the best of the PURC’s knowledge, however, the claim by WACAM cannot be true, the PURC maintained.
Nana Yaa Jantuah said, “as far as we are concerned, there is nowhere in the agreement that it states explicitly that the PURC cannot set tariffs’.
The agency at the center of attention, MiDA, has however dismissed WACAM’s claim saying the concerns have been resolved.
“Tariff will continue to be set by PURC…and they will have a number of inputs in tariff setting,” Chief Executive of MIDA Ing. Owura Safo said.
He explained that the Compact II is an international treaty which once ratified by Parliament becomes Ghanaian law.